SHRM Thought Leaders Retreat October 2006 Presented by

SHRM Thought Leaders Retreat October 2006 Presented by: William A. Schiemann CEO, Metrus Group

Title

Desired Learning – Measuring Engagement • “Tools for measuring engagement and for impacting the drivers” • “Actual metrics used by successful companies”

Desired Learning: Linkage • “Effective ways to link engagement to manager performance” • “Metrics that demonstrate the link between engagement and business results” • “How to be able to use (metrics) within a scorecard that is used by company executives”

Desired Learning: Building Buy-In • “Prevent engagement from becoming the “flavor of the month”” • “Engage those who have not bought into the concept of engagement” • “Connect managers with their responsibilities for employee engagement”

Desired Learning: Implementation • “Rapidly increase and sustain high levels of engagement” • “Better tapping into the mindset of Gen X and Gen Y” • “Develop a successful employee engagement strategy” • “Cost/resources efficient and effective practices”

Pre-Conference Survey Strategic measures in place for people strategy 50% Measuring engagement 71% Measuring employee alignment with strategy 42% Measuring capabilities to execute strategy 40% Engagement a key metric on Corporate Scorecard 52% 17% 31% Engagement linked to business outcomes 49% 24% 27% Favorable 22% 28% 11% 29% Neutral 18% 37% 31% Unfavorable

The Power of Measures Engagement linked to business outcomes Senior leadership is convinced of the value of engagement Over the last three years Employee Engagement at our organization has increased 0% 20% 40% 60% 80% 100% Strategic measures in place for People Strategy Strategic measures NOT in place

Who Gets Funded? Have a clear People Strategy Measuring employee alignment with strategy Engagement linked to business outcomes Engagement a key metric on Corporate Scorecard 0% 20% 40% 60% 80% 100% HR Gets Fair Share of Budget HR Gets Less Than Fair Share

What Differentiates Companies Where Engagement Is Growing? Have a clear People Strategy Measures in place for People Strategy Linked to business outcomes Leadership convinced of value Engagement on Corporate Scorecard 0% 20% 40% 60% 80% 100% Engagement increased significantly in past year Engagement flat or decreasing

Typical Low People Equity Profiles

Typical High People Equity Profiles

Biggest Barriers to Improving Engagement • Culture/attitudes - 24% • Understanding - 22% • Measurement - 20% • Resources - 14% • Leadership - 14% • Other - 6%

Barriers • Culture/Attitudes “As the workforce changes, old methods of connecting and engaging aren’t as effective” • Understanding “Helping managers understand they play a key role in employee engagement & retention” • Measurement “Reliance on financial measures over true people engagement measures” • Resources “Time to do it right” • Leadership “Lack of a clear corporate strategy”

“Selling” Engagement • Linkage to Business Outcomes – “Grab them by their P&L's and their hearts and minds will follow” – “We had a compelling reason to change. Our financials and customer service were horrible. ” – “ROI” – “Demonstrating the link to business strategies and identifying the right metrics” – “Organizational survey results reflected employee engagement as a primary driver of intent to stay” – “Linkage to guest satisfaction and financial performance” – “Human capital as an asset not an expense”

People Equity Alignment Are we going in the same direction? Capabilities Do we have what we need to succeed? Engagement Are we committed?